According to accountants who reviewed the foundation's audited financial statement for calendar year 2017, one asset category in the foundation's investment mix appears to be "digital," which could explain how the value of its assets jumped roughly 65 percent, to $13.5 billion, in a single year. The statement also showed the foundation received contributions totaling some $1.4 billion and awarded $1.3 billion in grants in 2017, suggesting that the growth in its assets "had to come almost entirely from investments."

The foundation "gave no explanation for the increase, which far exceeded any returns it could have reaped from a diversified stock and bond portfolio," the Chronicle notes. Indeed, at the end of 2016 the foundation had only $76.9 million in "real" assets. A year later, the audited financial report showed $4.46 billion in a category called Level 2 real assets. Brian Mittendorf, chair of the accounting department at Ohio State University, told the Chronicle that, based on the report's footnotes, that could only be what the report calls "digital assets," which are valued using pricing obtained from licensed online exchanges.

SVCF acknowledged gifts of cryptocurrencies "going back several years...held in a few individual donor-advised funds," and noted that it "had never purchased any and do not have any of these assets in our investment pools, consistent with our overall investment philosophy of maintaining a diversified mix of assets in our longer term investment pools." The foundation also said it has a liquidation plan to gradually sell the crypto assets over time and reinvest the proceeds in a diversified investment portfolio.

According to the Chronicle, most charities that accept cryptocurrencies sell them as soon as possible. Indeed, both the San Francisco Foundation and Schwab Charitable told the Chronicle that their policy is to liquidate gifts of cryptocurrencies as quickly as the day they are received. "I'm surprised an organization that large would hold a position that volatile at the end of the year," Mittendorf said.

Ray Madoff, a professor at the Boston College School of Law, said it is inappropriate for a foundation to allow donor-advised funds to hold cryptocurrencies when it wouldn't buy them itself. "The reason donors get tax benefits for a contribution to donor-advised funds is because the sponsoring organization has full legal ownership and control over those donated funds," Madoff said. "Therefore, their fiduciary duties should extend to those funds."